The recent tariff hike on goods imported from China — now reaching up to 145% — is sending shockwaves through U.S. businesses. For large corporations, navigating this may be frustrating but manageable. For small businesses? It’s a potential threat to profitability and operations.
But it doesn’t have to be a death sentence for your business. With a smart strategy and a bit of agility, you can adapt — and even come out stronger. Here’s how:
1. Rethink Where You Source Your Products
Now is the time to explore suppliers outside of China. Countries like Vietnam, Mexico, and India offer growing manufacturing capacity, often at competitive costs. Diversifying your supply chain not only helps with tariffs — it also protects you from future disruptions.
2. Take Advantage of Trade Programs
You may qualify for trade tools that can ease the burden:
- Duty Drawback: Get reimbursed for duties on products that you later export.
- Bonded Warehousing: Delay tariff payments until your goods are actually sold.
- Foreign Trade Zones (FTZs): Import products into a designated zone, where duties can be deferred or even eliminated.
These options take some paperwork, but for many small businesses, the savings can be worth it.
3. Reclassify Your Products (Legally)
Product classification determines how much duty you pay. A small change in how a product is labeled can have a big impact on tariffs — as long as it’s done according to customs law. Work with a licensed customs broker to explore your options.
4. Talk to Your Suppliers
Don’t assume you have to absorb all the cost yourself. Many suppliers are feeling the pressure too — and they may be open to adjusting prices, modifying packaging, or exploring split shipments to lower costs.
5. Modify Your Product Configuration
You can sometimes reduce the declared value (and the tariff burden) by changing how a product is imported — such as shipping batteries separately, simplifying packaging, or bundling differently. Every bit helps.
6. Stay Alert to Policy Changes
Trade policies are evolving fast. Certain categories have already received exemptions or reductions, and more may follow. Set alerts, follow industry updates, and talk to your logistics partners to stay informed.
Final Thoughts
These tariffs are tough — but not unbeatable. If you run a small business, agility is your superpower. Move quickly, explore alternatives, and take advantage of every available resource. What feels like a crisis today could be the catalyst for a more resilient and streamlined business tomorrow.